$1.6 Billion In Taxable Sales In Storey County. What’s Our Share?

$1.6 Billion In Taxable Sales For Storey County in FY 2016-2017. How much did we get?

Earlier this week TRIC Project Manager, Gilman Family Trust Risk Officer, Storey County Planning Commissioner, Blockchains, LLC Government Relations Advisor and Lance Gilman bunkmate Kris Thompson called Highlands resident Nicole Barde and Storey County Comptroller Hugh Gallagher liars on a post in the Virginia City Highlands email chat group. The conversation surrounded the $1.6 Billion in taxable sales shows just how embarrassingly little Storey County’s windfall was. Commissioner Jack McGuffey demonstrates his utter ignorance of financial reality every time he talks about a rebate or property tax reduction or Alaskaesque-annual-check-for-all this surplus cash that is pumped up the hill from TRIC to gush down C. Street.

For those who don’t know, Ms. Barde operates www.bardeblog.com where she covers most of the meetings that take place in Storey County. When she lost her bid for county commissioner in 2014, she began the blog as a way to counter the near blackout of information that the county shares with the residents.

Real Reporting in a Surreal County

In years past, the Comstock Chronicle was a genuine journalistic endaevour. With Angela Mann handing the reins over to Zach and Elaine Spencer, the Chronicle has become a public relations arm of the county, Comstock Mining and TRIC. After Karen Woodmanse sold her Virginia City News to the Zach and Elaine show, Ms. Barde provided a lone voice of transparency and context to the decision making process of Storey County.

When I showed up on the scene with my own personal brand of Junkyard Watch Dog Journalism, things have been a little more interesting. I find that the right people hate what I do, and the right people love The Teller. Because the ever-shrinking influence of the Good ‘ol Boy network can’t bully me the way they have everyone else who has stood up for what’s right has in the past, they can’t keep the heat from igniting their pants when they try to feed us Wild Horse Canyon Road Apples. I can’t lose my job, they can’t fire my wife, they can’t bully my kids and they can’t stop doing business with me. They can’t even sue me do get me to go away. All their evil tricks that they employed against good people in the past simply won’t work here.

Rest assured, I’m just getting started.

It is disgusting how little the county actually got from the record $1.6 billion (with a B) of taxable sales

Below are the comments in opposite order of how they posted on the chat group; First my response to Mr. Thompson, then Ms. Barde’s response to Mr. Thompson and finally Mr. Thompson’s commentary on Ms. Barde’s post that started this whole thing which you can find here…

When you accuse someone of lying and then use road apples to prove they’re liars, you light your own pants on fire.

Fact Misstatement #2

Mr. Thompson quotes the 2015-2016 audit by Kohn & Company CPAs, presumably TRIC’s hired guns, suggesting the money repaid to TRIC for developer costs at $2,788,141. Although there is no link provided for you, gentle reader, to see this audit for yourself, we’ll take him at his word.

So how much did we get?

I too asked the Nevada Department of Taxation (NDT) about how much money Storey County received from the record $1.6 billion in taxable sales in the form of a public records request on March 25th, 2018. Given the relatively basic nature of the request, I am amazed NDT can’t figure out by now. Confidence level waning.

I too asked Storey County Comptroller Hugh Gallagher how much we got from the record $1.6 billion in taxable sales, and he said “about a million”. Since Mr. Thompson chose not to provide a number for FY 2016-2017, we can assume he either doesn’t have them or they are pretty close to “about a million”. Pants on fire by omission.

Even if we got $3.5 million or even $5 million from the $1.6 billion in taxable sales, it’s chump change as I will show below.

Numbers May Be Tortured to Lie, Math Can Not.

Storey County’s rate is 7.6% and is made up of:

· 2% sales tax

· 2.6% local school support tax (LSST)

· .5% basic city-county relief tax (BCCRT)

· 1.75% supplemental city-county relief tax (SCCRT)

· .25% promotion of tourism

· .25% infrastructure

· .25% tri county railway commission

Here is what Mr. Spreadsheet has to say about what we should have received from the record $1.6 billion in taxable sales:

Taxable Sales = $1,600,000,000

2% Nevada State Sales Tax

$32,000,000.00

2.6% Local School Tax

$41,600,000.00

.5% basic city-county relief tax (BCCRT)

$8,000,000.00

1.75% supplemental city-county relief tax (SCCRT)

$28,000,000.00

.25% promotion of tourism

$4,000,000.00

.25% infrastructure

$4,000,000.00

.25% tri county railway commission

$4,000,000.00

Total Tax Revenue

$121,600,000.00

Mr. Spreadsheet says our schools should have gotten $41,600,000 and the county should have gotten a whopping $ 48,000,000.

Party on, Wayne!

Bait and Switch

Mr. Thompson reminds us that only two companies (Tesla and Switch) enjoy the status of tax freeloaders thanks to the GigaFactory “Deal (hustle) of the Century”, and that they can only dance on Storey County Taxpayer shoulders for another six years.

We can’t know for certain what impact this dancing has until the NDT comes clean with the breakdown of receipts from the record $1.6 billion in taxable sales from FY 2106-2017. When they do I will push that in another article on The Teller.

But if Mr. Gallagher’s estimate of “about a million” is close, we have two major takeaways from that:

The two freeloaders represent nearly all the volume of the taxable sales in Storey County, and

Since these sales are for one time purchases surrounding the building of the “GigaFactory”, we will never enjoy similar robust taxable sales numbers once the building is completed.

In other words, when the taxable sales music stops and the dance ends for Tesla and Switch in six years, there could very well be little to no taxable sales revenue coming in from TRIC.

In fact, I’ll bet you a doughnut that in six years it will forever be less than the $121,600,000 we should have received from FY 2016-2107.

Meanwhile, the cost to the county of maintaining three fire stations and law enforcement will dance on.

Time will tell what the real impact of Tesla, Switch and the other 150 “world class” companies have on our bottom line.

I remain hopeful that dancing to the music of the band of merry TRICsters will be a net win for all of Storey County and not just the select few.

But I’m not holding my breath.

postscript: Commissioner Gilman and Kris Thompson have been anointed “Government Relation Representatives” for Blockchains, the company behind the cryptocurrency Ethereum who just bought out TRIC and hope to turn their little corner of paradise into an amusement park for grownups. Although Jack McGuffey gets bamboozled putting his socks on every morning, we had better keep both hands on our wallets and not let them bamboozle Marshall McBride and Pat Whitten into giving away what is left of the farm for a couple bottles of Ripple and a free pass to Glance Thrillman’s petting zoo.

Nicole Barde’s Reply to Kris Thompson:

Kris,

You never fail to disappoint in your misreading of the actual words that I write.

While I have restrained from responding to your rants in the past I will now since I am running for the office of Commissioner in the general election. I want to make sure that people understand from ME what I say and mean ……and NOT what you say I mean.

If anyone has any doubt about where I stand on TRIC, corporate business, small business, community development and how to manage our finances PLEASE go to my website at bardecampaign.com and see the commitment that I make to the residents of this county on those and other issues. You can also call me at 775-583-8047…I don’t bite!

But I digress..a couple of things.

I have called the Department of Taxation to try and get the actual numbers. , ie what portion of the tax on the $1.6 Billion taxable sales , sales tax, does Storey actually get. They couldn’t tell me. So I recently asked Hugh Gallagher, our Comptroller, and he said “about $1Million”.

For anyone who’s worked with numbers you know that you can torture them to say anything. There are many sources for this number but Hugh has the books so I tend to believe him.

Additionally, it was discussed at a prior Commission meeting that we have to build two fire stations out at TRI and don’t have the funds to do it. It was hoped that Roger Norman would do it but now that TRIC is sold out the county has to find other deep pockets to help fund the fire stations.

If we are swimming in money why can’t we find the money to build them ?

The issue is that expenses are going up at a faster rate than revenue growth…..THAT is what I said at the meeting. I also said that laying off is hard so to be prudent on hiring.

Having had to lay off thousands of people over my 20 year span in a high tech corporation it is the worst thing I’ve ever had to do….and I don’t ever want to see that happen here again.

I am a TRIC supporter for the jobs and revenues it brings to the region. And while I support providing reasonable competitive incentives to get companies to move here I am not in favor of corporate welfare. While I support the effluvium pipeline, it was corporate welfare to expect tax taxpayers of this county to foot the bill for the pipeline.

As for Tesla , as of the 2017 report on the GOED website , Tesla had about 1000 Qualified Employees ( full time, Tesla/ Panasonic direct employees). The thousands you cite are temporary construction jobs, while wonderful for the economy they will go away once the job is done.

While I am exceedingly grateful that Tesla located at TRIC and I have high expectations that all that they have promised will come true. I am still a skeptic and in “ show me” mode.

SIDENOTE: All of those reports that you see touting that Storey County’s taxable sales are in the $1.6 BILLION dollar range are true………………………but with all of the abatement’s only $1 MILLION dollars makes it into the county’s coffers. This $1.6 billion dollar number is why our surrounding sister counties have painted a bulls-eye on us…..they want some of that non-existent revenue to offset their very real infrastructure costs of housing and schooling all the TRIC workers.

They don’t want to accept that we’re actually losing money on TRIC both in actual dollars and in opportunity costs.

These statements are flat out lies.

According to the most recent “TRI Public Private Partnership Schedule of Project Revenue and Net Revenue” dated June 30, 2016 the independent auditor from Kohn & Company CPAs found as follows:

Total Project Revenue to Storey County $5,299,815

Net Revenue $2,788,141 (this is the auditor’s calculation of revenues less costs which were paid to the County from TRI)

Also, the total project revenue is understated because for the first 15 years of the project through the inadvertence of both parties the calculation did not include Franchise Fees paid by TRI businesses to Storey County (which would be 1% of all energy bills paid by customers within TRI). Nor has it included all the fuel taxes paid to the county by purchases of gas, diesel, and propane by users in TRI. This is being corrected shortly.

By comparison the total project revenue to Storey County from TRI as stated in this report is over 1.5 times the amount of the entire county budget in 2001.

TRI has been very profitable for Storey County as the above figures show.

Of all the 150 companies at TRI, only 1 has full property tax and sales abatements, and that is Tesla. And half of the abatements expire in about 6 years. And even with all the abatements Tesla still pays significant money to reimburse Storey County for all it costs to Tesla, in seven figures I understand – and that revenue is not included in the above numbers.

Only one other company has major abatements – Switch, and Switch still pays 2.5% on their sales taxes.

And neither Tesla nor Switch have abatements for other categories of revenue to the County.

Of all the other companies, only around 17 or so are receiving incentives which include small tax credits and are for a year or two. All the other 120 companies receive no abatements nor incentives. And, the recent buyers into TRI – Google, Blockchains, and Reno Land, have not applied or asked for any abatements.

Ms. Barde and her buddies are anti-TRI and anti-Tesla, and always have been. Had it been up to up to her, Telsa and its 9,000 jobs would not be here. She railed in meeting after meeting that Tesla was a bad deal for the County and Northern Nevada and it would be a big failure. It isn’t a failure to the 9,000 people who have good jobs and all the small businesses that have contracts with the Gigafactory.

In fact, in the Commission meeting a few weeks ago Ms. Barde was frantic about Tesla and ranted that the County needs to make immediate plans to layoff County workers and staff, and cut back the County workforce because Tesla is going bankrupt soon. If you vote for anyone from the Barde crew you can bet that Tesla and all the TRI businesses will get squeezed and viewed as the enemy by Barde and her buddies. Economic development and job growth will come to a screeching halt overnight in a hurry in Storey County.